Wisdom Marine expects rising profits

CHANGING WINDS:The bulk carrier expects a capacity oversupply to ease next year as more players exit the market and help it continue outperforming its peers

By Amy Su / Staff reporter

Wisdom Marine Lines Co Ltd (慧洋海運), one of the nation’s major bulk shippers, expects earnings to continue rising next year, backed by its fleet expansion plan and strategy of signing long-term contracts with charters, a company official said yesterday.

“The shipping industry will see a rebound from the second half of next year,” Wisdom Marine chairman James Lan (藍俊昇) told reporters on the sidelines of the company’s investors’ conference.

Lan said this year has been a “most unfortunate” period for global bulk carriers, as a capacity oversupply has hurt the freight business and undermined profitability.

Citing a report by industrial research institute Clarksons Shipping Intelligence, Wisdom Marine said the number of global bulk vessels is forecast to grow 8 percent year-on-year this year, albeit slower compared with a growth rate of 17.4 percent last year.

With more players exiting the market and capacity growth slowing, the global supply and demand balance may return to the right track in the second half of next year, Lan said.

The outlook for bulk shipping demand is also more promising, with global export volumes of iron ore and coal — major bulk materials — posting double-digit growth year-to-date compared with the same period last year, the company added, citing the Clarksons report.

Lan said he was optimistic that Wisdom Marine’s profitability would outperform its peers in the bulk shipping sector either this year or next year, aided by its strategy of signing long-term contracts with global major charters over the past few years.

These contracts allowed the company to outpace its peers in terms of profitability in the first half of this year, Lan said.

After taking the delivery of five or six new bulk vessels next year, Wisdom Marine’s revenue is likely to climb higher and further boost its profitability, he said.

The bulk carrier said it also plans to expand its fleet to 100 vessels by the end of 2015, from the current 80.

Wisdom Marine’s profitability in the first half of this year was the highest among domestic listed bulk shippers, with net income reaching NT$1.22 billion (US$41.08 million), or NT$3.09 per share, up 13.92 percent from a year earlier, the company’s financial statement showed.

In the first eight months of the year, the company posted a net profit of NT$1.45 billion, or earnings per share of NT$3.69, data showed.